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Advocacy group recommends lifeline for US nuclear generators

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Advocacy group recommends lifeline for US nuclear generators

More than one-third of America's emissions-free nuclear power plants are either at risk of early closure or already slated for retirement, a new report by the Union of Concerned Scientists warned.

To avoid backsliding on greenhouse gas emissions reductions, the uneconomic nuclear plants should be provided with financial support at an estimated average cost of $814 million a year to bring them to the break-even point of staying operational, the advocacy group recommended.

The Nov. 8 union, or UCS, report, titled "The Nuclear Power Dilemma: Declining Profits, Plant Closures, and the Threat of Rising Carbon Emissions," found that up to 21 out of 60 nuclear plants in the United States potentially will retire before their operating licenses expire in the coming decade. Those threatened plants are mostly single reactor facilities with a combined operating capacity of nearly 23 GW, which represents approximately 22% of nuclear capacity in the U.S.

According to the UCS, six nuclear power plants are slated to retire as a result of economic, safety or performance issues. The other 15 plants, mostly in the Midwest and mid-Atlantic, are at risk of early closure largely because of high operating costs and an influx of cheap natural gas supplies that have suppressed electricity prices to historical lows. Five of those plants are owned by merchant generators that sell their power in competitive markets, while the remaining 10 are owned by regulated utilities that recover their costs from ratepayers.

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The report emphasized that the at-risk and retiring nuclear generation will be replaced primarily by carbon-emitting natural gas- and coal-fired generation. According to the report, the retirements could result in a cumulative increase in carbon emissions from the U.S. power sector of between 4% and 6%, or 0.7 billion metric tons to 1.25 billion metric tons, by 2035. However, in contrast to claims often made by nuclear advocates, the report found that the shutdowns pose no threat to power grid reliability and resilience.

"The United States is facing a dilemma," said Steve Clemmer, the report's co-author and UCS's director of energy research and analysis, in a press release. "Nuclear power plants are being squeezed economically at a time when we need every source of low-carbon power we can get to replace retiring coal plants and prevent an overreliance on natural gas."

Clemmer urged that strong federal and state policies be implemented to save endangered nuclear plants that meet stringent safety standards while the U.S. continues to cut emissions by ramping-up investments in renewables, efficiency and other low-carbon technologies.

The UCS noted that making financial support of reactors contingent on meeting strong safety and performance standards would exclude some at-risk nuclear plants until they have passed inspections by the U.S. Nuclear Regulatory Commission.

The UCS said financial support should come with strings attached by requiring plant owners to fully disclose their finances and demonstrate need. This echoes the situation in Connecticut, where officials have clashed with Dominion Energy Inc. in their effort to see the books of the company's majority-owned Millstone plant before allowing the plant to compete for a zero carbon power supply contract. Further, the UCS said regulators should limit financial support of nuclear plants and adjust the support over time to reduce ratepayer costs while ensuring that no cheaper alternatives for securing the same level of low carbon power exist.

Along with Connecticut, other states also have taken steps to begin shoring up nuclear economics, with Illinois, New York and soon New Jersey implementing zero-emissions credit subsidies that compensate at-risk nuclear power plants for avoided emissions at above-market prices.

National solutions: Carbon pricing and low-carbon electricity standards

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Report co-author and UCS senior energy analyst Jeremy Richardson said the best solution for preventing a backslide in emissions reductions is implementing a national carbon price alongside a suite of other economywide complementary policies. "A carbon price would level the playing field for all low-carbon technologies and address the current market failure," he said.

In addition to preserving existing nuclear generation in the U.S., nationwide carbon pricing would increase investments in solar panels and wind turbines as well as make other low-carbon technologies, such as carbon capture and storage, more economically viable.

According to the UCS study, if a national carbon price or low-carbon electricity standard were adopted, the new policies would prevent the potential early closures of all the unprofitable and marginally economic nuclear plants identified in the analysis. The U.S. also would be on track to achieve emissions reductions called for in the Paris Agreement on climate change if its at-risk nuclear power plants stay online.

The analysis found that cumulative carbon emissions from the U.S. power sector would be 28% lower by 2035 under a "modest" $25-per-ton carbon price that starts in 2020 and rises 5% a year or 19% lower by 2035 under a low-carbon electricity standard mandating that 60% and 80% of U.S. electricity come from nuclear and other clean energy by 2030 and 2050, respectively. That carbon price would bring about $234 billion in net cumulative public health and economic benefits by 2035, while the low-carbon electricity standard would bring $61 billion in such benefits, the report said.

In a statement, America's largest nuclear power plant owner, Exelon Corp., welcomed the UCS report as a "big moment in the fight against climate change" and endorsed the UCS's call for a technology-neutral, nationwide carbon price.

In a press release, Maria Korsnick, president and CEO of the Nuclear Energy Institute, which serves as the industry's trade lobby, said the explicitly pro-nuclear analysis is a "forward leaning moment for an organization of significant influence in America's climate and science community" and reflective of an increasing consensus that recognizes the environmental contributions of nuclear.